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DiggPrevious Web 2.0 failures that the press has noticed include Fold.com, which closed earlier this year, and PubSub, which shrank in June.
Debate now centers around whether this is a harbinger of things to come. Robert Scoble thinks so. So does Dharmesh Shah. And of course, they're right. The market has no need for so many startups doing similar things.
Scoble writes, "There are simply too many companies chasing too few users." Indeed, most Internet users haven't even experimented with any of Google's non-search offerings, let alone all the new services offered by startups they've never heard of. However, it's important to differentiate between startups that have raised insitutional venture capital and those that have raised no money or just angel funding. While many are claiming that Web 2.0 startups don't need venture capital, when times get tough, it can certainly be beneficial to have the expertise and capital that VC money can bring.
Microsoft's Don Dodge notes that Kiko's calendar service was a feature, not a company. But, that doesn't preclude a startup from achieving a successful exit. Google, Yahoo, Microsoft, AOL and IAC have staffs busy sizing up startups offering features they covet. It worked for Writely's founders as well as others. The important thing is to develop a feature in a unique and defensible way at just the time there is a real need for it in the market.
To bid on Kiko, click on the screen shot below:
Tags: kiko, vc, venture capital.
